Are The Markets Ahead Of The Economy?

WEEKLY ECONOMIC UPDATE

February 20, 2012
The Hitchcock Maddox Financial Planning

CONSUMER PRICES UP 0.2% FOR JANUARY
Major factors in this increase in the Consumer Price Index include a 0.9% rise in the price of clothing as well as rising rents and healthcare costs. Core CPI also rose 0.2% in January. The annualized inflation rate hit 2.3% last month, yet the Federal Reserve expects but a 1.6% gain in the CPI across 2012. Wholesale inflation ticked up 0.1% for January, with the core Producer Price Index up 0.4%.1

RETAIL SALES FALL SHORT OF (HIGH) EXPECTATIONS
The Census Bureau reported a healthy 0.4% rise in U.S. retail purchases for January. However, economists polled by Dow Jones Newswires thought they would rise 0.9% for the month. Subtract a 1.1% decline in auto sales from the data, and retail sales were up 0.7% for January.2

LEADING INDICATORS HIT 3½-YEAR PEAK
The Conference Board’s Leading Indicator Index rose 0.4% in January, with seven of ten indicators improving. (The most notable positive detected: a widening in the spread between short-term and long-term interest rates.) The index advanced for a fourth consecutive month.3

NASDAQ 3,000? DOW 13,000?
Both indices approached those psychological landmarks on Friday. The Dow went +1.16% for the week, the NASDAQ +1.65% and the S&P 500 +1.38%. At week’s end, the Dow was at 12,949.87, the NASDAQ at 2,951.78 and the S&P at 1,361.23. Oil futures soared 4.63% last week on the NYMEX to settle at $103.24 a barrel Friday. Gold had a flat week, settling at $1,724.50 Friday on the COMEX following a 0.07% five-day advance.4,5,6

THIS WEEK: U.S. financial markets are closed Monday for the Presidents Day holiday; big news could come out of Europe Monday, as Eurozone finance ministers could greenlight a new bailout package for Greece. Tuesday, earnings reports roll in from Barnes & Noble, Macy’s, Dell, Saks, Wal-Mart, Kraft Foods, Home Depot and Radio Shack. Wednesday, the NAR puts out data on January existing home sales and quarterly results come in from Toll Bros., MGM, TJX, Dollar Tree, Fluor, Conseco, Hertz and Hewlett-Packard. Thursday brings earnings from Target, Kohl’s, Hormel, OfficeMax, Safeway, Sears, Public Storage, Gap and AIG. Friday, the final University Of Michigan consumer sentiment survey for February appears, the Census Bureau publishes January new home sales figures and J.C. Penney, Scripps and Berkshire Hathaway issue Q4 results.

Sources:cnbc.com, bigcharts.com, treasury.gov, treasurydirect.gov – 2/17/124,7,8,9
Indices are unmanaged, do not incur fees or expenses, and cannot be invested into directly.
These returns do not include dividends.

The Hitchcock Maddox Financial Planning is a service of Hitchcock Financial, LLC. Investment Advisor Representative of Investment Advisors, a Registered Investment Advisor and a divison of ProEquities, Inc. Securities offered through ProEquities, Inc., a Registered Broker-Dealer, member FINRA & SIPC. Hitchcock Financial, LLC is independent of ProEquities, Inc.
This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. Marketing Library.Net Inc. is not affiliated with any broker or brokerage firm that may be providing this information to you. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. The Dow Jones Industrial Average is a price-weighted index of 30 actively traded blue-chip stocks. The NASDAQ Composite Index is an unmanaged, market-weighted index of all over-the-counter common stocks traded on the National Association of Securities Dealers Automated Quotation System. The Standard & Poor’s 500 (S&P 500) is an unmanaged group of securities considered to be representative of the stock market in general. It is not possible to invest directly in an index. NYSE Group, Inc. (NYSE:NYX) operates two securities exchanges: the New York Stock Exchange (the “NYSE”) and NYSE Arca (formerly known as the Archipelago Exchange, or ArcaEx®, and the Pacific Exchange). NYSE Group is a leading provider of securities listing, trading and market data products and services. The New York Mercantile Exchange, Inc. (NYMEX) is the world’s largest physical commodity futures exchange and the preeminent trading forum for energy and precious metals, with trading conducted through two divisions – the NYMEX Division, home to the energy, platinum, and palladium markets, and the COMEX Division, on which all other metals trade. Additional risks are associated with international investing, such as currency fluctuations, political and economic instability and differences in accounting standards. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. All economic and performance data is historical and not indicative of future results. Market indices discussed are unmanaged. Investors cannot invest in unmanaged indices. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional.

Citations.
1 – www.sltrib.com/sltrib/money/53537035-79/prices-inflation-percent-costs.html.csp [2/17/12]
2 – blogs.wsj.com/marketbeat/2012/02/14/retail-sales-miss-expectations-no-need-to-freak-out/ [2/14/12]
3 – www.usatoday.com/money/economy/story/2012-02-17/january-leading-economic-indicators/53130756/1 [2/17/12]
4 – www.cnbc.com/id/46427808 [2/17/12]
5 – montoyaregistry.com/Financial-Market.aspx?financial-market=common-financial-mistakes-and-how-to-avoid-them&category=29 [2/17/12]
6 – blogs.wsj.com/marketbeat/2012/02/17/data-points-energy-metals-547/ [2/17/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F17%2F11&x=0&y=0 [2/17/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F17%2F11&x=0&y=0 [2/17/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F17%2F11&x=0&y=0 [2/17/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F16%2F07&x=0&y=0 [2/17/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F16%2F07&x=0&y=0 [2/17/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F16%2F07&x=0&y=0 [2/17/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=DJIA&closeDate=2%2F19%2F02&x=0&y=0 [2/17/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=COMP&closeDate=2%2F19%2F02&x=0&y=0 [2/17/12]
7 – bigcharts.marketwatch.com/historical/default.asp?symb=SPX&closeDate=2%2F19%2F02&x=0&y=0 [2/17/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyield [2/17/12]
8 – treasury.gov/resource-center/data-chart-center/interest-rates/Pages/TextView.aspx?data=realyieldAll [2/17/12]
9 – treasurydirect.gov/instit/annceresult/press/preanre/2002/ofm10902.pdf [1/9/02]

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